Real hosted Milan after a humiliating 4-0 home defeat by Barcelona in the Clasico over a week ago, and they were again dominated at their own ground in a display that exposed last season's European champions' poor defending and lack of firepower.
Ancelotti urged his players to react quickly so that they do not fall too far behind in the hunt for a top-eight finish in the 36-team Champions League table which offers direct qualification to the last 16. They are currently languishing in 17th place with six points after four games.
"We have to be concerned, the team is not playing well," the Italian said after the game.
"We need to be more compact, more organised, we've conceded a lot of goals... The team is not well organised on the pitch and we need to work on this.
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